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The regulatory storm strikes again!

According to data from 123rd International Trade, 10 listed companies including Shenyang Chemical, Tongde Chemical, Zhongqingbao, Renzixing, ST Dongshi, Huiyu Pharmaceutical, Fudan Fuhua, Rihai Intelligent, Yongjin Holdings, and Jinfu Technology have been investigated since August, attracting widespread attention from the market.

The number of newly filed case announcements has more than tripled that of July, with the main minefields involving "illegal and irregular information disclosure" and "short-term trading of company stocks".

Analysts believe that a series of cases may cause some volatility in the market in the short term, and some investors may lose confidence. However, in the long run, this strict supervision and transparent market environment can effectively reduce speculative behavior and enhance the credibility and health of the entire market.

ST Dongshi: 29 daily limit ups and 40 daily limit downs

Judging from the performance in the secondary market, among the above-mentioned 10 companies, ST Dongshi's stock price fluctuated the most, with a total of 29 daily limit increases and 40 daily limit decreases so far this year.

ST Dongshi's main business is motor vehicle driver training and civil aircraft pilot training. The announcement shows that the company's actual controller Xu Xiong received a "Notice of Filing" issued by the China Securities Regulatory Commission on August 7, 2024, and was investigated for suspected illegal information disclosure.

Xu Xiong has served as the chairman of ST Dongshi, executive director and general manager of Oriental Fashion Investment since 2005. He was arrested in 2023 on suspicion of manipulating the securities market. In the first half of this year, ST Dongshi repeatedly exposed information disclosure violations, all of which were related to Xu Xiong. Due to the failure to disclose the freezing of shares in a timely manner, on March 15, the controlling shareholder and actual controller of ST Dongshi were given a regulatory warning by the Shanghai Stock Exchange.

According to the public trading information released by the Shanghai and Shenzhen Stock Exchanges on August 9, ST Dongshi was listed as S, ST, and *ST for three consecutive trading days with a cumulative increase deviation of 12%. ST Dongshi closed at 1.60 yuan that day, with a change of 5.26%, a turnover rate of 2.60%, and a turnover of 29.615 million yuan. During the abnormal period from August 7 to August 9, the increase was 15.11%, the cumulative deviation was 15.29%, and the trading volume in the interval was 90.1895 million yuan.

On August 9, ST Dongshi issued an announcement on abnormal fluctuations in stock trading, asking investors to pay attention to the risks of secondary market transactions.

The company's 2024 semi-annual performance forecast shows that the net profit attributable to shareholders of the listed company in the first half of 2024 is expected to be between -84.72 million yuan and -69.32 million yuan; the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses is between -84.82 million yuan and -69.40 million yuan.

Beijing Dahua International Accounting Firm (Special General Partnership) audited the effectiveness of the company's internal control of the 2023 financial report and issued a negative opinion "Internal Control Audit Report". According to Article 9.8.1 of the "Shanghai Stock Exchange Listing Rules" and other relevant regulations, the company's stock was suspended for one day on April 30, 2024, and other risk warnings were implemented from May 6, 2024.

Ren Zixing: Lowest revenue and worst loss

Judging from operating performance, among the above 10 companies, Ren Zixing has the lowest revenue and the biggest loss.

Ren Zixing focuses on the field of network security and is deeply engaged in cyberspace data governance. The announcement shows that the China Securities Regulatory Commission has decided to file a case against the company because it is suspected of violating laws and regulations on information disclosure.

After the company's self-inspection, the reason for the filing of this case was mainly because the company discovered through self-inspection that its wholly-owned subsidiary Beijing Yahong Century Technology Development Co., Ltd. had overstated assets, overstated revenues, and overstated profits in relevant years. The company has actively carried out rectification, corrected accounting errors and made retroactive adjustments to the relevant annual financial statements, and hired an accounting firm to issue relevant audit reports.

Ren Zixing's 2023 annual report shows that during the reporting period, the company achieved operating income of approximately 609 million yuan, a year-on-year decrease of 16.56%; the net profit attributable to shareholders of the listed company was a loss of approximately 124 million yuan; and the basic earnings per share was a loss of 0.1841 yuan.

In the first quarter of 2024, Ren Zixing achieved operating income of 24.41 million yuan, a year-on-year decrease of 57.57%, and a net loss of 70 million yuan attributable to the parent, an increase of 19.64% year-on-year. The net cash flow generated by operating activities was -107 million yuan, which continued to deteriorate year-on-year. The asset-liability ratio was 47.30%, an increase of 0.20 percentage points year-on-year.

In the secondary market, the company's stock price has been on a downward trend this year, hitting new lows. On August 12, it opened at the limit down. As of press time, the price was 3.18 yuan per share, with a latest market value of 2.142 billion yuan.

On June 20, Ren Zixing announced that the company recently received a letter from the company's director Peng Qinghua titled "About the Situation of My Relatives' Short-Term Trading in the Company's Stocks and Apology", and learned that his spouse Deng Hailong bought and sold the company's stocks from June 6, 2024 to June 18, 2024. According to relevant laws and regulations, the above transactions constitute short-term trading. Deng Hailong's income of 2,300 yuan from this short-term transaction has been fully turned over to the company.

Guangdong Province has the strictest measures, and pharmaceutical and biological industries are key industries

Judging from their operating performance, the above 10 companies involve multiple industries, including computers, power equipment, social services, petroleum and petrochemicals, pharmaceuticals and biology, media, communications, basic chemicals, steel, etc.

Among them, there are two companies in the pharmaceutical and biological field, namely Huiyu Pharmaceutical and Fudan Fuhua.

Huiyu Pharmaceutical focuses on the research and development, production and domestic and overseas sales of innovative drugs and high-quality generic drugs in the field of tumor treatment. The announcement shows that Ding Zhao, chairman and general manager of the company, received a notice of filing a case from the China Securities Regulatory Commission on August 5 for suspected short-term trading of the company's stocks. This matter is an investigation of Ding Zhao personally and will not have a significant impact on the operation of the company's board of directors and the company's daily business activities.

Fudan Fuhua mainly engages in software development, biomedicine, and science and technology park industries. The announcement shows that the China Securities Regulatory Commission has decided to file a case against the company because of suspected violations of information disclosure laws and regulations. Fudan Fuhua received an administrative supervision measure decision letter from the Shanghai Securities Regulatory Bureau on March 19. Upon investigation, the company concealed liabilities, falsely settled accounts, and improperly recognized accounting from 2013 to 2017, resulting in false records in the periodic financial reports disclosed from 2013 to 2023, which violated relevant regulations.

From a regional perspective, there are as many as three companies in Guangdong Province, namely Renzixing, Zhongqingbao and Sunsea Intelligent Technology. Among them, Sunsea Intelligent Technology has been punished for violations three times this year.

Sunsea Intelligent's main business is divided into three sectors: wireless communication module business, communication equipment business, and communication engineering service business. In the first half of this year, the company achieved a total operating income of 1.613 billion yuan, a year-on-year increase of 22.75%; the net profit attributable to the parent company was a loss of 38.0166 million yuan, a loss of 107 million yuan in the same period last year; the non-net profit loss was 39.657 million yuan, a loss of 120 million yuan in the same period last year; the net cash flow generated by operating activities was -104 million yuan, compared with 32.5324 million yuan in the same period last year.

Not only is Sunsea Intelligent stuck in the quagmire of losses, but it is also embroiled in multiple lawsuits.

According to Sunsea Smart Energy's disclosure on July 31, since the company's last disclosure of the "Announcement on the Cumulative New Major Litigation and Arbitration Situation" on July 9 to the announcement date, the company and its holding subsidiaries have accumulated a total of 117 new lawsuits and arbitration cases, involving a total amount of 21.4525 million yuan, accounting for 10.70% of the company's latest audited net assets. Among them, the total amount of lawsuits and arbitration cases in which the company and its holding subsidiaries are plaintiffs is 9.5227 million yuan, and the total amount of lawsuits and arbitration cases in which the company and its holding subsidiaries are defendants is 11.9299 million yuan. As of now, the above-mentioned lawsuits and arbitration cases are still in progress. Given the great uncertainty in the results of the lawsuits or arbitrations, the impact of the above-mentioned cases on the company's current or post-period profits is uncertain.

In terms of the intensity of investigation and supervision, April and May were the peak periods, with as many as 20 and 21 listed companies under investigation. If the current trend continues, the number is expected to reach a new high in August.